Strong And Under The Radar Today: Scholastic (SCHL)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Scholastic ( SCHL) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Scholastic as such a stock due to the following factors:

  • SCHL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $10.4 million.
  • SCHL is making at least a new 3-day high.
  • SCHL has a PE ratio of 36.
  • SCHL is mentioned 1.13 times per day on StockTwits.
  • SCHL has not yet been mentioned on StockTwits today.
  • SCHL is currently in the upper 20% of its 1-year range.
  • SCHL is in the upper 35% of its 20-day range.
  • SCHL is in the upper 45% of its 5-day range.
  • SCHL is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in SCHL with the Ticky from Trade-Ideas. See the FREE profile for SCHL NOW at Trade-Ideas

More details on SCHL:

Scholastic Corporation operates as a children's publishing, education, and media company in the United States. The stock currently has a dividend yield of 1.4%. SCHL has a PE ratio of 36. Currently there is 1 analyst that rates Scholastic a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Scholastic has been 219,500 shares per day over the past 30 days. Scholastic has a market cap of $1.4 billion and is part of the services sector and media industry. The stock has a beta of 0.65 and a short float of 13.9% with 7.73 days to cover. Shares are up 20.8% year-to-date as of the close of trading on Monday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Scholastic as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 2.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 373.68% to $18.00 million when compared to the same quarter last year. In addition, SCHOLASTIC CORP has also vastly surpassed the industry average cash flow growth rate of 15.01%.
  • SCHL's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.43 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Compared to its closing price of one year ago, SCHL's share price has jumped by 40.66%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • SCHOLASTIC CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SCHOLASTIC CORP increased its bottom line by earning $1.34 versus $1.03 in the prior year. This year, the market expects an improvement in earnings ($1.70 versus $1.34).

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

More from Markets

Facebook Prepares for Earnings and 4 Other Stories You Must Know Wednesday

Facebook Prepares for Earnings and 4 Other Stories You Must Know Wednesday

Facebook's Investors Have a Big Day Ahead

Facebook's Investors Have a Big Day Ahead

Facebook, Boeing, Shire and Credit Suisse - 5 Things You Must Know

Facebook, Boeing, Shire and Credit Suisse - 5 Things You Must Know

The Global Stock Market Rout Spreads Across the World

The Global Stock Market Rout Spreads Across the World

Comcast Details $30 Billion Bid for Britain's Sky in Takeover Battle With Fox

Comcast Details $30 Billion Bid for Britain's Sky in Takeover Battle With Fox